On 9 June 2021, El Salvador became the first-ever country to accept Bitcoin as legal tender. This, after the country’s lawmakers, voted in a legislature “supermajority” of 62 out of 84 votes to accept the country’s Bitcoin Law. In summary, this Bitcoin Law means that prices of goods and services in El Salvador can now officially be displayed in Bitcoin. This also extends to the payment of taxes and any other things in the Central American country.
An interesting move by El Salvador considering that the country already didn’t have its own currency and was using the US Dollar for pricing everything and displaying prices. Interestingly, following El Salvador’s President Nayib Bukele’s announcement on the adoption of the Bitcoin Law, several Central American and South American countries have hinted and shown interest in doing the same.
That declaration by El Salvador seems to have spread across the world and even seems to have inspired many others, even in Africa. The latest being a call for Nigeria to adopt a Bitcoin Standard.
This was suggested by an American footballer born to Nigerian parents, Russell Okung, when he penned an open letter to Nigeria’s President Muhammadu Buhari. In the letter, Okung makes a curious plea that the interest of the Nigerian economy is in the hands of central bankers who, I paraphrase, are not so concerned about Nigerians. As such, Okung suggests that the solution is for Nigeria to adopt a Bitcoin Standard so that it can have “economic independence” and “financial sovereignty.” He further states that it is a matter of urgency that Nigeria pursues this because of Bitcoin’s finite supply (21 million) which is fast approaching (slightly over 18 million Bitcoins have been mined to date).
On the surface, in my opinion, this sounds commendable. However, several questions need to be asked and a few things pointed out.
Already, as Okung omits, there are several “Whales” and people/organizations that hold a considerable number of Bitcoins to make them easily key to the movement of the Bitcoin price, i.e. should they sell a significant portion of their Bitcoin holdings in exchange for any other currency, it would cause a significant drop in the price. Also, reading the Bitcoin white paper, it states clearly that Bitcoin is meant to be an electronic cash and payments system. Unfortunately, Bitcoin has failed in this regard given, mainly, high transaction fees and a volatile price that makes it difficult to price any day-to-day goods and services in the cryptocurrency.
So, how exactly will adopting Bitcoin as a standard help Nigeria?
Looking at other people who are pushing for countries to adopt Bitcoin as legal tender or a standard (e.g. Jack Dorsey, the Winkelvoss twins, etc.), they all are either significant HODLrs of Bitcoin or have a vested interest (through the solutions their companies provide) in seeing Bitcoin become widely adopted. As such, their motives are naturally in question too.
Considering the cost of transactions, price volatility, and the speed at which transactions are verified on the Bitcoin network, what benefit will adopting a Bitcoin Standard be for a country such as Nigeria?
Or is this all just one big push by a group of people to de-dollarize the world?
🤔 Russell Okung, an American football player born of Nigerian parents, has written an “open letter” to Nigeria’s President, Muhammadu Buhari, asking that he and the Federal Government consider adopting a Bitcoin Standard. “I am proudly a Nigerian descendant living in America and am a proponent of Bitcoin. I write to urge the Nigerian government to pursue economic independence and financial sovereignty by pursuing a national Bitcoin standard.” wrote Okung in a letter that was also shared by Twitter co-founder and CEO, Jack Dorsey. The question though is how does Nigeria benefit as it neither holds a significant amount of Bitcoin nor does it have much control of Bitcoin. Link
⚖️ Apple’s conduct [vs Epic Games] locks consumers in, preventing them from moving to other systems due to high switching costs. This restricts consumer choice and monopolizes the market. This brings into the spotlight the thin line between a company’s market dominance through innovation and a technology company becoming a monopoly. Competition is essential for innovation, innovation is essential for society. Science, technology, engineering, and mathematics are the tools that are used to forge and realize civilization's potentiality. Ensuring universal access to these tools ensures universal participation in industrializing society. Link
📲 UNDP and CSIR launch affordable internet connectivity in Kwazulu-Natal, South Africa. The project by the CSIR and UNDP was first launched in Mdantsane, Eastern Cape, with Mdantsane Mobile. The most recent launch was held in KZN with Adnotes TVWS Network. It will see thousands of community members in and around Ray Nkonyeni Municipality in the Ugu District of KwaZulu-Natal (KZN) now having access to low cost internet connection like their counterparts in the cities following a successful launch of the Television White Space (TVWS) technology in the area. The project was funded by the United Nations Development Programme (UNDP) through the Government of Japan. Link
📲 The Central Bank of Nigeria (CBN) announced that it will be launching a Central Bank Digital Currency (CBDC) before the end of 2021. This was announced by Rakiyat Mohammed, Director, Information Technology Department, CBN: “We have currency in two forms in Nigeria as of now, there are the notes and there are the coins. So the Central Bank currency is to be the third form of money which means just as we have electronic money, digital money is not new in Nigeria. Just as we are about the third or fifth in the whole world as far as advancement in the use of digital money is concerned.” Link
🛢️ The proposed East African Crude Oil Pipeline (EACOP) project risks driving East African countries involved further into unsustainable debt at the mere prospect of reaping meager earnings with the only entities bound to benefit from it being the foreign oil companies. “No government should take such dire economic risks and push the lives of its already struggling citizens into deeper poverty. Standard Bank in cahoots with other major EACOP proponents are, however, resolutely keen on baking debts, the kind that future generations will still be tasting decades from now.” Link
Thought of the Day
Considering the cost of transactions, price volatility, and the speed at which transactions are verified on the Bitcoin network, what benefit will adopting a Bitcoin Standard be for a country such as Nigeria? (Tweet this | Share on WhatsApp)
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